Gas pipelines for 5 fertiliser plants likely by March 2014

NEW DELHI: Gas pipelines for five naphtha-based fertiliser plants, including Madras Fertilisers, Zuari Industries and MCFL, are likely to be laid by the end of 2013-14 financial year, the government said today.

"There are five naphtha-based units. Gas pipeline to all these plants is expected to be laid by end of year 2013-14," Minister of State for Fertiliser Srikant Kumar Jena said in a written reply to the Rajya Sabha.

Madras Fertilisers Ltd (MFL), SPIC-Tuticorn, Mangalore Chemicals and Fertiliser Ltd (MCFL), Zuari Industries and Kanpur Fertilisers and Chemicals Ltd are five units that use naphtha as main feedstock for producing ammonia, he said.

These plants are in the process of coverting into natural gas-based units in order reduce cost of production. Once their conversion, Jena said the five units would require extra 6.18 mmscmd gas per annum in the next two years.

With respect to four units that run on oil and Low Sulphur Heavy Stock (LSHS), the minister said three units of National Fertiliser Ltd ( NFL) and one unit of Gujarat Narmada Valley Fertilisers Corporation (GNVFC) are already connected to gas pipelines.

These four units would require additional 3.75 mmscmd gas per annum in the next two years, he added. On requirement of natural gas for fertiliser sector, Jena said 46.9 mmscmd natural gas is required to run the current units, 19.2 mmscmd for expansion of existing units and 16.8 mmscmd for reviving closed units.

Asked how would companies meet their gas requirement in 2013-14 and 2014-15, the minister said each company enters into a gas sale purchase agreement with gas supplying company, who in turn sources gas either from domestic market or through imports, he added.

Replying to a separate question on adjustment of subsidy given to companies allocated subsidised gas for non-fertiliser products, Jena said the EGoM on gas in February this year had asked the Department of Fertilisers to finalise the guidelines on allocation of domestic gas to potassium and phosphatic fertilisers plants by May 2012 and place the matter before it.

"The Department of Fertilisers is in the process of formulating guidelines after consultation with the industry," he said.